AIG : The Rabbit hole.

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Op maandag 9 maart 2009 11:57 schreef Maanvis het volgende:
Kan een land eigenlijk oneindig lang doorgaan met het verstrekken van bailouts? Voor zover ik heb begrepen gebeurt dat met geleend geld dat wordt 'geproduceerd' door de centrale bank en is daar geen limiet op, behalve dan hoeveel staatsschuld een land wil oplopen.

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Op maandag 9 maart 2009 12:34 schreef Maanvis het volgende:
Nog 1 vraagje dan:
: Fie staatsschuld die scheld en we maar ff kwijt?

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Op maandag 9 maart 2009 12:38 schreef digitaLL het volgende:

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Dat betekent dat een land default op het aftbetalen van schulden zoals obligaties.

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Op maandag 9 maart 2009 14:47 schreef Maanvis het volgende:

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Defaulten is toch gewoon niet betalen?

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Mijn vraag was eerder: Wat gaat de centrale bank dan doen als we die schulden gewoon ff niet terugbetalen? (bijv. om de burger bezuinigingen/belastingverhoging te besparen)

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Op maandag 9 maart 2009 15:13 schreef digitaLL het volgende:

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Yep
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Ik denk niets tenzij men voor monetization gaat en de obligaties dus met vers gedrukt geld uitbetaalt.
Zimbabwe style zeg maar.
Een default is trouwens ernstig omdat het investeringsklimaat ernstig geschaad wordt.
Rusland heeft in de jaren 90 gedefault en het heeft lang geduurd eer er weer wat geinvesteerd werd. Bovendien was de kapitaalvlucht enorm toen de kredietcrisis uitbrak omdat men Rusland opeens weer bovenaan de ladder van onbetrouwbaarheid zag staan.

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Op maandag 9 maart 2009 15:58 schreef Maanvis het volgende:

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En wat zal het resultaat zijn als elk westers land bewust default om z'n burgers de gevolgen van de crisis te besparen?

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Op maandag 16 maart 2009 11:46 schreef SeLang het volgende:
Als ik het goed lees dan is de meerderlheid van het Amerikaanse bailout geld naar Europese banken gegaan (incl ING en Rabo )!

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AIG publishes counterparty list
By Julie MacIntosh in New York and Alan Beattie in Washington

Published: March 15 2009 23:25 | Last updated: March 15 2009 23:25

AIG caved in to political pressure Sunday and released a list of some of the financial counterparties that benefited from its $160bn US government rescue, including some of Europe’s largest banks.

The list’s publication came after weeks of mounting anger on Capitol Hill that lifelines of public money had been extended to AIG without a clear indication of where the money had gone.

Lawmakers have said that without full disclosure of AIG’s counterparties, Congress would not vote for more money for stabilising the financial system.

AIG has sold hundreds of billions of dollars of credit insurance through AIG Financial Products – the unit that contributed most heavily to the company’s near-collapse in September.

The insurer, which is now attempting to unwind that financial exposure, issued details Sunday on some of the payments it had made to counterparties using emergency government loans.

AIG paid out $22.4bn of collateral related to credit default swaps, $27.1bn to help cancel swaps and another $43.7bn to satisfy the obligations of its securities lending operation. The payments were made between September 16 and the end of last year.

Goldman Sachs, which has also accepted US government support, received payments worth $12.9bn. Three European banks – France’s Société Générale, Germany’s Deutsche Bank and the UK’s Barclays – were paid the next-largest amounts. SocGen received $11.9bn; Deutsche $11.8bn; and Barclays $7.9bn.

Many European banks used AIG’s credit insurance to keep from having to hold capital against their long-term securities holdings. Wall Street banks also used swaps to hedge their subprime mortgage-backed securities portfolios.

A spokeswoman for the US Federal Reserve said Sunday that AIG’s collateral payments were based on “contracts that don’t differentiate domestic versus international companies”. She said the Fed’s aid to AIG helped all of its counterparties, which range from global banks to individual insurance policyholders.

In a fractious hearing on March 5, senators criticised Don Kohn, Fed vice-chairman, for failing to push for publication of the list.

At the time, Mr Kohn said: “I would be very concerned if we started revealing lists of names of companies that did transactions” with AIG. Such publication could rebound not just on the counterparties but on other US financial institutions operating in the same markets, he said.

Under pressure from lawmakers, the Fed went back to AIG and worked out a compromise schedule of publication.

Now that the list is public, the large number of foreign banks that have received money as a byproduct of AIG’s rescue has the potential to cause fresh anger on Capitol Hill. Congress has expressed concern at allowing taxpayer money to leak abroad or to foreign workers.

Nick Ashooh, AIG spokesman, said the group has made headway in its attempts to reduce its exposure to credit default swaps and other derivatives. The notional value of its derivatives exposure has dropped to about $1,600bn from about $2,700bn a year ago, and its CDS exposure has been cut from $433bn to $302bn.

AIG stoked more ire in Washington over the weekend when it became apparent the company would pay $165m in retention bonuses Sunday to employees of AIG Financial Products.

AIG chief Edward Liddy said the bonuses represented “legal, binding obligations”, but said AIG would make a range of compensation cuts in the unit this year.

Mr Liddy also expressed concern that AIG could have difficulty attracting and retaining talent if “employees believe that their compensation is subject to continued and arbitrary adjustment by the US Treasury.”

Bron: Financial Times

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Op maandag 16 maart 2009 11:55 schreef SeLang het volgende:

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Op maandag 16 maart 2009 11:46 schreef SeLang het volgende:
AIG counterparties (pdf), document vrijgegeven door AIG zelf (gisteren):
http://www.aig.com/aigweb(...)es_tcm385-153017.pdf

Als ik het goed lees dan is de meerderlheid van het Amerikaanse bailout geld naar Europese banken gegaan (incl ING en Rabo )!
Zal lekker helpen met het draagvlak voor de bailouts

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Op maandag 16 maart 2009 11:46 schreef SeLang het volgende:
Zal lekker helpen met het draagvlak voor de bailouts

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Op dinsdag 17 maart 2009 00:18 schreef Caesu het volgende:

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dat gaat dus ook geen tweede keer gebeuren.
of zouden ze zelfs geld terug gaan vragen van Europa.

soortgelijks gebeurd in Oost-Europa (en IJsland).
Wereldbank/IMF schiet daar te hulp.
maar die bailouts moeten ze meteen terugbetalen aan West-Europese/Scandinavische banken.
ze voelen zich goed belazerd door W-Europa daar in Oost-Europa en nu dus ook de Amerikanen.

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Dear A.I.G., I Quit!
Published: March 24, 2009

The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”

Sincerely,

Jake DeSantis

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Op donderdag 26 maart 2009 00:51 schreef eleusis het volgende:

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Bron: http://www.nytimes.com/2009/03/25/opinion/25desantis.html

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Op donderdag 26 maart 2009 06:44 schreef Lemmeb het volgende:

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hoax

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Op donderdag 26 maart 2009 07:56 schreef Perrin het volgende:

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Hoax in de NYT?

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Op donderdag 26 maart 2009 12:28 schreef Dennism het volgende:
Ben ik het niet volledig mee eens, als deze man en zijn afdeling aan welke hij leiding geeft inderdaad een positief resultaat behaald heeft met zijn business unit, en hierdoor positief bijgedragen heeft aan het negatieve resultaat van AIG en AIG heeft keer op keer gezegt dat de bonussen in deze niet ter discussie gesteld zouden worden daar hij ook al werkt voor $1 per jaar + bonus bij goed resultaat, dan ben ik van mening dat deze bonussen niet ter discussie moeten staan maar gewoon uitgekeerd moeten worden zonder bemoeienis van "lynch mobs" en politieke figuren die wel even munt willen slaan uit de sinds kort populaire gewoonte om alle bonusses terecht of onterecht maar aan de kaak te stellen.

Ik ben ook niet voor alle bonussen welke beloofd c.q. uitgedeeld worden in de wereld. Maar bestaande contracten dien je gewoon te respecteren, en als de bonus criteria behaald worden dienen deze dan ook uitgekeerd te worden.

als iemand goed zijn werk doet en positieve resultaten afleverd heb ik geen moeite met bonussen, wanneer echter iemand er met de pet naar gooit, miiljarden aan afschrijvingen veroorzaakt en dan nog denkt een bonus te kunnen krijgen door wat creatief te boekhouden en daarmee aan te tonen dat er alsnog een positief resultaat behaald is, dan mag de bonus per direct inhouden worden van mij.

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Op donderdag 26 maart 2009 13:35 schreef SeLang het volgende:
Die briefschrijver heeft gewoon groot gelijk.

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AIG Vilification Costs Firm, Loews CEO Tisch Says


By Erik Holm and Erik Schatzker

March 26 (Bloomberg) -- American International Group Inc., the insurer bailed out by the U.S. government, is losing customers and employees amid Congressional vilification of the firm, the head of a competing company said.

Complaints by lawmakers about AIG’s bonus payments are tarnishing the firm and driving commercial insurance customers to rivals, said Loews Corp. Chief Executive Officer James Tisch. Loews owns 90 percent of Chicago-based business insurer CNA Financial Corp.

Tisch’s comments reinforce remarks by AIG’s CEO, Edward Liddy, who has said some bonus payments are needed to retain staff as the insurer seeks to sell businesses and repay the U.S. loan. Executives at competing firms had anticipated that AIG, with financial backing by the government, would undercut rivals to retain customers as it put the businesses on the block.

“It’s helped CNA, but it disappoints me as a taxpayer,” Tisch said in a Bloomberg Television interview. “It should have been much more difficult for us to compete against AIG, but the reality is, I think it’s become dramatically easier. And that’s because Congress has made such a stink over compensation.”

A profitable property-casualty division was the centerpiece of Liddy’s strategy to revive AIG and woo private investors following the government’s initial $85 billion bailout in September. That plan stalled amid deepening losses on subprime investments and Liddy’s difficulty finding buyers for other units, and the taxpayer-funded bailout has since been revised three times and grown to a package valued at $182.5 billion.

AIG ‘Wounded’

AIG privately told the government in February that its U.S. commercial insurance business has struggled to attract customers as employees quit to work for competitors, said a person familiar with the situation.

“The AIG name is so thoroughly wounded and disgraced that we’re probably going to have to change it,” Liddy told a Congressional panel this month. “If I can’t turn this situation around, we run the risk that that business does atrophy.”

AIG, once the world’s largest insurer, has already begun the process of rebranding several units, including the operation that sells commercial coverage in the U.S. A portion of that unit may be offered to the public in a stock sale as part of the plan to pay back the government.

AIG’s decision to pay $165 million in bonuses this month after the latest revision of its bailout triggered a public outcry, and President Barack Obama called the payments “inappropriate.” Liddy has since asked employees at its money- losing Financial Products unit to return bonus money, prompting one company vice president to submit his resignation in an opinion piece published yesterday in the New York Times.

The A Team

“They’ve made sure that the A team and the B team are out the revolving door at AIG, and what’s going to be left is the third and fourth string,” Tisch said. ‘For the life of me, I don’t understand how that is good for the country.”

AIG and CNA compete selling coverage to businesses to protect against worker injuries, property damage and lawsuits.

“We have a leading franchise with great people committed to our clients,” said Christina Pretto, an AIG spokeswoman, when told of Tisch’s comments.

The Government Accountability Office, the investigative arm of Congress, said in a March 18 report that state insurance regulators, brokers and buyers of business coverage “have seen no indications that AIG’s commercial property-casualty insurers are selling coverage at prices inadequate to cover the risk involved.” AIG provided the GAO with examples where the firm lost business, the report said.

Tisch said that if AIG was unable to continue selling coverage, there would be “significant price increases” for commercial insurance buyers.